You recently purchased a stock that is expected to earn 30 percent in a booming economy, 9 percent in a normal economy, and lose 33 percent in a recessionary economy. there is a 5 percent probability of a boom and a 75 percent chance of a normal economy. what is your expected rate of return on this stock?

You are looking at a one-year loan of $16,500. the interest rate is quoted as 8.7 percent plus two points. a point on a loan is 1 percent (one percentage point) of the loan amount. quotes similar to this one are common with home mortgages. the interest rate quotation in this example requires the borrower to pay two points to the lender up front and repay the loan later with 8.7 percent interest. what rate would you actually be paying here?